Sweden

Index:

PEOPLE

Sweden has one of the world's highest life expectancies and one of the lowest birth rates. The country counts at least 17,000 Sami among its population. About one-fifth of Sweden's population are immigrants or have at least one foreign-born parent. The largest immigrant groups are from Finland, Serbia and Montenegro, Bosnia-Herzegovina, Iran, Norway, Denmark, and Poland. This reflects Nordic immigration, earlier periods of labor immigration, and later decades of refugee and family immigration.

Swedish is a Germanic language related to Danish and Norwegian but different in pronunciation and orthography. English is by far the leading foreign language, particularly among students and those under age 50.

Sweden has an extensive child-care system that guarantees a place for all young children from 2-6 years old in a public day-care facility. From ages 7-16, children attend compulsory comprehensive school. After completing the ninth grade, 90% attend upper secondary school for either academic or technical education.

Swedes benefit from an extensive social welfare system, which provides for childcare and maternity and paternity leave, a ceiling on health care costs, old-age pensions, and sick leave among other benefits. Parents are entitled to a total of 12 months' paid leave between birth and the child's eighth birthday, with one of those months reserved specifically for the father. A ceiling on health care costs makes it easier for Swedish workers to take time off for medical reasons.

HISTORY

During the seventh and eighth centuries, the Swedes were merchant seamen well known for their far-reaching trade. In the ninth century, Nordic Vikings raided and ravaged the European continent as far as the Black and Caspian Seas. During the 11th and 12th centuries, Sweden gradually became a unified Christian kingdom that later included Finland. Queen Margaret of Denmark united all the Nordic lands in the "Kalmar Union" in 1397. Continual tension within the countries and within the union gradually led to open conflict between the Swedes and the Danes in the 15th century. The union's final disintegration in the early 16th century brought on a long-lived rivalry between Norway and Denmark on one side and Sweden and Finland on the other.

In the 16th century, Gustav Vasa fought for an independent Sweden, crushing an attempt to restore the Kalmar Union and laying the foundation for modern Sweden. At the same time, he broke with the Catholic Church and established the Reformation. During the 17th century, after winning wars against Denmark, Russia, and Poland, Sweden-Finland (with scarcely more than 1 million inhabitants) emerged as a great power. Its contributions during the Thirty Years War under Gustav II Adolf (Gustavus Adolphus) determined the political as well as the religious balance of power in Europe. By 1658, Sweden ruled several provinces of Denmark as well as what is now Finland, Ingermanland (in which St. Petersburg is located), Estonia, Latvia, and important coastal towns and other areas of northern Germany.

Russia, Saxony-Poland, and Denmark-Norway pooled their power in 1700 and attacked the Swedish-Finnish empire. Although the young Swedish King Karl XII (also known as Charles XII) won spectacular victories in the early years of the Great Northern War, his plan to attack Moscow and force Russia into peace proved too ambitious; he fell in battle in 1718. In the subsequent peace treaties, the allied powers, joined by Prussia and England-Hanover, ended Sweden's reign as a great power.

Sweden suffered further territorial losses during the Napoleonic wars and was forced to cede Finland to Russia in 1809. The following year, the Swedish King's adopted heir, French Marshal Bernadotte, was elected Crown Prince as Karl Johan by the Riksdag (parliament). In 1813, his forces joined the allies against Napoleon. The Congress of Vienna compensated Sweden for its lost German territory through a merger of the Swedish and Norwegian crowns in a dual monarchy, which lasted until 1905, when it was peacefully dissolved at Norway's request.

Sweden's predominantly agricultural economy shifted gradually from village to private farm-based agriculture during the Industrial Revolution, but this change failed to bring economic and social improvements commensurate with the rate of population growth. About 1 million Swedes immigrated to the United States between 1850 and 1890.

The 19th century was marked by the emergence of a liberal opposition press, the abolition of guild monopolies in trade and manufacturing in favor of free enterprise, the introduction of taxation and voting reforms, the installation of a national military service, and the rise in the electorate of three major party groups--Social Democratic Party, Liberal People's Party, and Conservative Party.

During and after World War I, in which Sweden remained neutral, the country benefited from the worldwide demand for Swedish steel, ball bearings, wood pulp, and matches. Postwar prosperity provided the foundations for the social welfare policies characteristic of modern Sweden. Foreign policy concerns in the 1930s centered on Soviet and German expansionism, which stimulated abortive efforts at Nordic defense cooperation. Sweden followed a policy of armed neutrality during World War II and currently remains nonaligned.

Sweden became a member of the European Union (EU) in 1995. With the prospect of the enlargement of the EU from 15 to 25 countries on May 1, 2004, concerns arose that the Swedish welfare system would be unduly burdened by an influx of workers from the new member states. In March of that year, following similar action by other EU member states, the Swedish Government introduced legislation in the Riksdag proposing welfare and labor restrictions for migrant workers from the 10 accession countries for at least two years. However, the Riksdag rejected the bill at the end of April. This defeat was seen as a major reverse for the government and meant that Sweden was one of the few EU countries without any restrictions limiting access to jobs or social security to citizens of the new member states.

The perceived failure of the main political parties to adequately address the strong current of EU skepticism expressed in Sweden's rejection of the euro led to the February 2004 formation of a new political grouping, the Junilistan (June List), which opposed further integration with the EU, but did not advocate withdrawal. The grouping stressed that it was not itself a political party, and went as far as appending its candidates' usual party affiliation to their names on the ballots for the forthcoming elections to the European Parliament. In this way voters would be able to support the June List on the issue of the EU while not altogether abandoning their usual party. This strategy proved successful, allowing the June List to draw support from across the political spectrum. It was widely believed that the June List's success in the European elections might increase pressure on the government to consider holding a national referendum on the ratification of the EU constitutional treaty, which had finally been approved by the Council of the EU in June 2004. Instead, the government chose to present the treaty for approval (or otherwise) in the Riksdag; legislation was to be presented by September 2005, with a view to adoption in December of that year. However, following the rejection of the treaty at national referendums in France and the Netherlands in mid-2005, Sweden was one of several member states to decide to delay the ratification process indefinitely.

In May 2005 the UN Committee against Torture ruled that Sweden had violated the 1984 UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment in December 2001 by returning an asylum seeker to Egypt, where he had been convicted in absentia of membership of a terrorist group. Human rights groups had earlier expressed concern at the treatment of the asylum seeker and another Egyptian national deported at the same time; the two men had controversially been flown to Egypt in a U.S.-leased aircraft, having been handed over to U.S. security officials by the Swedish authorities. In November 2005 the Swedish Government ordered the Civil Aviation Authority to investigate media reports that aircraft used by the U.S. Central Intelligence Agency (CIA) had landed at Swedish airports while transporting suspected terrorists to third countries for interrogation. In the following month the Authority, which examined the period from January 2002, reported that it could not substantiate the claims.

In September 2005 the Riksdag rejected a proposed amnesty for illegal immigrants living in Sweden, despite considerable public support for such a measure. Following the vote, a number of protests took place and 150,000 signatures were collected in favor of an amnesty. In November the Riksdag approved legislation allowing failed asylum seekers to reapply for a residence permit before the end of March 2006. It was estimated that 20,000 asylum seekers whose deportation orders had not been carried out due to conditions in their home countries or who had gone into hiding after having their original applications refused would be eligible to submit new applications under the law.

In February 2006 the government announced its intention for Sweden to overcome its dependency on petroleum within 15 years, without constructing any further nuclear power stations. A committee of industrialists, academics, farmers, vehicle manufacturers, civil servants, and others was charged with devising a plan to achieve this, and was to report to the Riksdag later that year. The government hoped to protect Sweden from the adverse economic effects of climate change and from fluctuations in the price of petroleum, which had increased substantially in recent years.

In March 2006 Laila Freivalds resigned as Minister for Foreign Affairs, following criticism of her ministry's involvement in forcing the temporary closure, in February, of the website of SD-Kuriren--the newspaper of the far-right SD (Swedish Democrats)--which had asked readers to submit cartoons of the Prophet Muhammad. (The publication of caricatures depicting the Prophet in a Danish newspaper in late 2005, and in a number of other European newspapers in early 2006, had led to world-wide protests by Muslims.) Freivalds had initially denied responsibility for the decision to intervene, which Prime Minister Goran Persson had denounced as being contrary to the freedom of the press. She had already come under pressure to resign in December 2005 after an independent commission held her partly responsible for the government's slow response to the tsunamis in Southeast Asia on December 26, 2004 (which killed more than 500 Swedes). Jan Eliasson, the President of the UN General Assembly, was appointed as the new Minister for Foreign Affairs and held both positions until the expiry of his UN term in September 2006.

Elections to the Riksdag were held on September 17, 2006. The Alliance for Sweden (a coalition of four center-right parties--the Moderate Party, the Liberal People's Party, the Christian Democrat, and the Center Party) won 178 of the 349 seats, securing Fredrik Reinfeldt the position of Prime Minister, while the Swedish Social Democratic Party (SAP) coalition took 171 seats. Taking a cue from the British Labor Prime Minister's electoral strategy a decade earlier, Reinfeldt remodeled his party as 'New Moderates,' moving away from the party's right-wing, upper-class roots to appeal to a large middle ground of voters, and successfully winning over many who had until then supported the SAP, as well as others who had previously voted for the smaller, non-socialist parties. Reinfeldt was instrumental in uniting the notoriously divided four-party, center-right opposition. The Alliance managed to offer a cohesive campaign and a set of alternative policies that persuaded the electorate that change was both possible and desirable. The Social Democratic Party had been predominant in government for 65 of the 74 years since 1932, and the 2006 election ended its recent term of 12 years in office.

GOVERNMENT

Popular government in Sweden rests upon ancient tradition. The Swedish parliament (Riksdag) stems from tribal courts (Ting) and the election of kings in the Viking age. It became a permanent institution in the 15th century. Sweden's government is a limited constitutional monarchy with a parliamentary system. Executive authority is vested in the cabinet, which consists of a prime minister and 20 ministers who run the government departments. The present Alliance for Sweden government, led by Prime Minister Fredrik Reinfeldt, came to power in September 2006. King Carl XVI Gustaf (Bernadotte) ascended to the throne on September 15, 1973. His authority is formal, symbolic, and representational. The unicameral Riksdag has 349 members, popularly elected every 4 years, and is in session generally from September through mid-June.

Sweden is divided into 21 counties and 288 municipalities. Each county (län) is headed by a governor, who is appointed by the central government. Each county has a popularly elected council with the power of taxation, and each council has particular responsibility for education, public transportation, health, and medical care. Elected municipal councils are headed by executive committees roughly analogous to the boards of commissioners found in some U.S. cities.

Swedish law, drawing on Germanic, Roman, and Anglo-American law, is neither as codified as in France and other countries influenced by the Napoleonic Code, nor as dependent on judicial practice and precedents as in the United States. Legislative and judicial institutions include, in addition to the Riksdag, the Supreme Court, the Supreme Administrative Court, the Labor Court, Commissions of Inquiry, the Law Council, District Courts and Courts of Appeal, the Chief Public Prosecutor, the Bar Association, and ombudsmen who oversee the application of laws with particular attention to abuses of authority.

Consulates General are in New York, Chicago, and Los Angeles. There also are consulates in 31 other U.S. cities. Contact the embassy for locations and telephone numbers.

POLITICAL CONDITIONS

Ordinary general elections to the Swedish parliament are held every fourth year on the third Sunday in September. County council and municipal council elections take place at the same time. The last elections were held in September 2006. There is a barrier rule intended to prevent very small parties from gaining representation in the parliament. A party must thus receive at least 4% of the votes in the entire country or 12% in a single electoral district to qualify for any seats.

The September 2006 election was won by a coalition of four center-right parties (the Moderate Party, the Liberal People's Party, the Christian Democrats, and the Center Party) called the Alliance for Sweden. The 2006 election results for Sweden's major parties were as follows: the Social Democratic Party (34.99%; 130 seats), the Moderate Party (26.23%; 97 seats), the Center Party (7.88%; 29 seats), the Liberal People's Party (7.54%; 28 seats), the Christian Democrats (6.59%; 24 seats), the Left Party (5.85%; 22 seats), and the Green Party (5.24%; 19 seats).

The Social Democratic Party has a base of blue-collar workers, intellectuals, and public sector employees. It derives much of its power from strong links with the National Swedish Confederation of Trade Unions (LO), which represents around 90% of Sweden's blue-collar workers. The party program combines a commitment to social welfare programs and government direction of the economy.

The Moderate Party emphasizes personal freedom, free enterprise, and reduction of the public-sector growth rate, while still supporting most of the social benefits introduced since the 1930s. The party also supports a strong defense and Sweden's membership in the European Union (EU). Its voter base is urban business people and professionals, but the party also attracts young voters, main-street shop owners, and, to a modest extent, blue-collar workers.

The Center Party maintains close ties to rural Sweden. The main concerns of the Center Party are the elimination of nuclear power and increased centralization of governmental authority.

The Left Party, formerly the Communist Party, is today a party which expresses some of the traditional values of the social democrats but which also is focused on the environment and opposes Swedish membership in the EU. Its voter base consists mainly of public sector employees, journalists, and former social democrats.

The Christian Democrats have their voter base among those who belong to free churches--Methodists, Baptists, etc. They seek better ethical practices in government and the teaching of traditional values in the schools. They also want to improve care for the elderly and have an extensive family policy program. They strongly support Swedish membership in the EU and the European Monetary Union (EMU).

The Liberal People's Party's platform is "social responsibility without socialism," which includes a commitment to a free-market economy combined with comprehensive Swedish social welfare programs. Foreign aid and women's equality also are popular issues. The Liberal People's Party base is mainly centered in educated middle-class voters.

The Green Party is an environmentalist party that attracts young people. The party takes a strong stand against EU membership and wants a new referendum on the issue. The Greens support a phasing-out of nuclear energy in Sweden and hope to replace it with alternative, environmentally friendly energy sources.

When Sweden became a member of the EU in 1995, some argued that it went against Sweden's historic policy of neutrality (Sweden had not joined the EU during the Cold War because it was incompatible with neutrality). Others viewed the move as a natural extension of the economic cooperation that had been going on since 1972 with the EU. Sweden addressed this controversy by reserving the right not to participate in any future EU defense alliance. Sweden also reserved the right to make the final decision on whether to join the third stage of the EMU (a common currency and central bank) "in light of continued developments."

Although many Swedes have publicly expressed their dissatisfaction with membership in the EU, main Swedish concerns include winning popular support for EU cooperation, EU enlargement, and strengthening the EU in areas such as economic growth, job promotion, and environmental issues.

Sweden is a member of the UN and some of its specialized and related agencies, including the World Bank, World Trade Organization (WTO), Food and Agriculture Organization (FAO), the International Labor Organization (ILO), International Atomic Energy Agency (IAEA), United Nations Educational, Scientific, and Cultural Organization (USESCO), World Health Organization (WHO) and others; also of the EU, European Free Trade Association (EFTA), Council of Europe, and others. Sweden is a member of NATO's Partnership for Peace and participates in numerous international peacekeeping operations.

ECONOMY

Sweden is a highly industrialized country. Agriculture, once accounting for nearly all of Sweden's economy, now employs less than 2% of the labor force. Extensive forests, rich iron ore deposits, and hydroelectric power are the natural resources which, through the application of technology and efficient organization, have enabled Sweden to become a leading producing and exporting nation.

The Swedish economic picture has brightened significantly since the severe recession in the early 1990s. Growth has been strong in recent years, with an annual average GDP growth rate of 2.5% for the period 2000-2004 and 2.7% in 2005. The inflation rate is low, with an annual average inflation rate of about 1.5% for 2006, but unemployment remains a stubborn problem. The unemployment rate held steady in recent years at about 5% and in 2005 reached 7.8%. Since the mid-1990s, Sweden's export sector has grown significantly as the information technology (IT) industry, telecommunications, and services have overtaken traditional industries such as steel, paper, and pulp. The overall current-account surplus has traditionally been much smaller than the merchandise trade balance, as Sweden has generally run a deficit on trade in services, net income flows, and unrequited transfers. However, since 2003 this has not been the case, as the services balance swung into surplus in 2003 and improved further in 2004 and 2005. In addition, the income account also swung from deficit into surplus in 2003, before slipping back to register small deficits in 2004 and 2005. Although the transfers balance remained in deficit, mainly as a result of Sweden's contributions to the EU budget, the overall current-account surplus was larger than the trade surplus in 2003-05. Most categories of services exports produced an improvement over this period, but the biggest contribution came from business services exports, followed by transportation and royalties and license fees.

During 2005 real GDP rose by 2.7% and expanded by 3.4% in 2006. The government budget improved dramatically from a record deficit of more than 12% of GDP in 1993 to a surplus of 2.7% of GDP in 2005. The new, strict budget process with spending ceilings set by parliament, and a constitutional change to an independent Central Bank, have greatly improved policy credibility. This can be seen in the long-term interest rate margin versus the Euro, which is negligible. From the perspective of longer-term fiscal sustainability, the long-awaited reform of old-age pensions entered into force in 1999. This entails a far more robust system vis-à-vis adverse demographic and economic trends, which should keep the ratio of total pension disbursements to the aggregate wage bill close to 20% in the decades ahead. Taken together, both fiscal consolidation and pension reform have brought public finances back on a sustainable footing. Gross public debt, which jumped from 43% of GDP in 1990 to 78% in 1994, stabilized around the middle of the 1990s and has been decreasing in recent years. In 2005 public debt was about 50.3% of GDP. These figures show excellent improvement of the Swedish economy since the crisis of the early 1990s.

Eighty percent of the Swedish labor force is unionized. For most unions there is a counterpart employers' organization for businesses. The unions and employer organizations are independent of both the government and political parties, although the largest federation of unions, the National Swedish Confederation of Trade Unions (LO), always has maintained close links to the largest political party, the Social Democrats. There is no fixed minimum wage by legislation. Instead, wages are set by collective bargaining.

U.S. direct investment in Sweden in 2004 was approximately $2.6 billion. There were major investments in computer software and hardware, IT/telecommunications, industrial goods, and health care.

FOREIGN RELATIONS

Swedish foreign policy is based on the premise that national security is best served by staying free of alliances in peacetime in order to remain neutral in the event of war. In 2002, Sweden revised its security doctrine. The new security doctrine still states that "Sweden pursues a policy of non-participation in military alliances," but permits cooperation in response to threats against peace and security. The Swedish Government devotes particular attention to issues of disarmament, arms control, and nuclear nonproliferation and has contributed importantly to UN and other international peacekeeping efforts, including the NATO-led peacekeeping forces in the Balkans. Sweden also contributes to the International Security Assistance Force (ISAF) in Afghanistan and assumed leadership of the Provincial Reconstruction Team in Mazar e-Sharif in March 2006.

Sweden participates actively in the United Nations, including as a member of the Security Council in 1997-98, and other multilateral organizations. In January 1995, Sweden became a full member of the European Union after a referendum in late 1994 indicated that 52.3% of participants wanted to join. Sweden became a member in part due to its increasing isolation outside the economic framework of the Maastricht Treaty. It sits as an observer in the Western European Union and is an active member of NATO's Partnership for Peace (PFP) and the Euro-Atlantic Partnership Council. Sweden also cooperates closely with its Nordic neighbors, formally in economic and social matters through the Nordic Council of Ministers and informally in political matters through direct consultation.

Swedish governments do not consider that nonalignment precludes taking outspoken positions in international affairs. Government leaders have favored national liberation movements that enjoy broad support among developing world countries, with notable attention to Africa. During the Cold War, Sweden was suspicious of the superpowers, which it saw as making decisions affecting small countries without always consulting those countries. With the end of the Cold War, that suspicion has lessened somewhat, although Sweden still chooses to remain nonaligned.

TRAVEL AND BUSINESS INFORMATIONThe U.S. Department of State's Consular Information Program advises Americans traveling and residing abroad through Consular Information Sheets, Public Announcements, and Travel Warnings. Consular Information Sheets exist for all countries and include information on entry and exit requirements, currency regulations, health conditions, safety and security, crime, political disturbances, and the addresses of the U.S. embassies and consulates abroad. Public Announcements are issued to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas that pose significant risks to the security of American travelers. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain country because the situation is dangerous or unstable.

The Department of State encourages all U.S citizens traveling or residing abroad to register via the State Department's travel registration website or at the nearest U.S. embassy or consulate abroad. Registration will make your presence and whereabouts known in case it is necessary to contact you in an emergency and will enable you to receive up-to-date information on security conditions.

Emergency information concerning Americans traveling abroad may be obtained by calling 1-888-407-4747 toll free in the U.S. and Canada or the regular toll line 1-202-501-4444 for callers outside the U.S. and Canada.

The National Passport Information Center (NPIC) is the U.S. Department of State's single, centralized public contact center for U.S. passport information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer service representatives and operators for TDD/TTY are available Monday-Friday, 7:00 a.m. to 12:00 midnight, Eastern Time, excluding federal holidays.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled "Health Information for International Travel" (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Further Electronic InformationDepartment of State Web Site. Available on the Internet at
http://www.state.gov, the Department of State web site provides timely, global access to official U.S. foreign policy information, including
Background Notes and
daily press briefings along with the directory of
key officers of Foreign Service posts and more. The Overseas Security Advisory Council (OSAC) provides security information and regional news that impact U.S. companies working abroad through its website http://www.osac.gov

Export.gov provides a portal to all export-related assistance and market information offered by the federal government and provides trade leads, free export counseling, help with the export process, and more.

STAT-USA/Internet, a service of the U.S. Department of Commerce, provides authoritative economic, business, and international trade information from the Federal government. The site includes current and historical trade-related releases, international market research, trade opportunities, and country analysis and provides access to the National Trade Data Bank.